The online room-rental service Airbnb is reportedly close to securing a new round of funding that would value the company at $10bn – making it worth more than several leading hotel chains.

The Wall Street Journal reported on Thursday that the San Francisco-based company is in advanced talks to raise between $400m and $500m with private-equity firm TPG. At $10bn, Airbnb would be one of the world’s most valuable startups and worth more than than Hyatt Hotels ($8.3bn) or Wyndham Worldwide ($9.4bn).

Founded in 2008, Airbnb allows individuals to rent out rooms, apartments and homes for short stays. The company is arguably the world’s largest hotel company, having helped set up more than 10m stays in 550,000 rooms in 34,000 cities. It added nearly 250,000 properties to its service in 2013.

Airbnb’s popularity has attracted the ire of hotel chains who claim the service allows renters to dodge lodging taxes and that the company should be regulated in the same way that they are.

New York attorney general Eric Schneiderman subpoenaed Airbnb last October demanding information on its 15,000 hosts in the state. New York state law prohibits renters from subletting their homes for less than 30 days if the host is not present. The challenge came after Airbnb had pledged to work with the state to collect occupancy taxes and root out bad actors. The company is contesting the order, arguing it is unreasonably broad.

Airbnb’s valuation has quadrupled since it last raised money in 2012 at a price that valued it at $2.5bn from investors including PayPal billionaire Peter Thiel’s Founders Fund, Andreessen Horowitz and Sequoia Capital. Ashton Kutcher is another of the company’s early backers.

The company is part of the so-called “sharing economy” that has shaken up the taxi industry as well as the hotel industry with services like Uber and Lyft that allow people to use their own cars to freelance as part-time taxi drivers. Uber is valued at $3.8bn, following an investment last year by Google Ventures, TPG and others.